Hemant Goyal vs. The State Of Jharkhand

Facts

The petitioners, Hemant Goyal (Managing Director) and Anil Kumar Goyal (Director) of Narsingh Ispat Udyog Private Limited, were arrested and remanded to judicial custody in connection with Dhansar P.S. Case No. 155 of 2021. The FIR was lodged by respondent no. 2, alleging that the petitioners induced him to purchase imported coking coal by misrepresenting their business and the quality of coal, leading to a loss of Rs. 4.63 Crores. The petitioners claim a long-standing business relationship with the informant, involving transactions worth approximately Rs. 200 Crores. They contend that the criminal proceedings were initiated malafide to avoid payment of Rs. 4 Crores owed to their company, and that statutory documents like invoices, e-way bills, and GST returns support their claim. The petitioners challenged their arrest, arguing it was illegal for non-compliance with Section 41-A of the CrPC and the principles laid down in Arnesh Kumar v. State of Bihar. They also sought to quash the remand order.

Held

The Court held that the petitioners had made out a case for interference concerning their arrest before the submission of the charge-sheet. It noted that the petitioners, being Managing Director and Director, were not flight risks and had cooperated with the investigation. The Court found that the arrest was made without sufficient justification and without adhering to the principles of Section 41-A CrPC and the Arnesh Kumar guidelines, which mandate a judicial enquiry by the Magistrate to ascertain the necessity of arrest. While the remand order had taken effect, the Court considered the liberty of the petitioners. Therefore, the Court allowed the interim application for release on bail and partly allowed the criminal writ petition. The petitioners were directed to be released on bail subject to furnishing sureties. The Court emphasized that arrest should not be made routinely and requires reasonable satisfaction regarding the genuineness of the complaint and the necessity of arrest, supported by materials on record. The Court did not explicitly quash the FIR or the remand order but granted bail, effectively providing relief to the petitioners. The specific issue of whether the ingredients of Sections 406 and 420 IPC were made out was implicitly addressed by granting bail based on the lack of justification for arrest and the civil nature of the dispute.

Key Issues

1. Whether the FIR and subsequent criminal proceedings initiated under Sections 406, 420, 120-B, 467, 468, 471, 504, and 506 of the Indian Penal Code are liable to be quashed for lack of essential ingredients of the alleged offences, particularly in a commercial transaction dispute. 2. Whether the arrest of the petitioners was illegal due to non-compliance with Section 41-A of the Code of Criminal Procedure and the guidelines laid down in Arnesh Kumar v. State of Bihar. 3. Whether the remand order dated 10.09.2021 is liable to be quashed. Arguments for the Petitioners: The petitioners argued that the allegations in the FIR do not constitute criminal offences, but rather a civil dispute arising from a commercial transaction. They contended that the essential ingredients for cheating (Section 415 IPC) and criminal breach of trust (Section 406 IPC) are absent, particularly the dishonest intention at the time of the alleged promise. They relied on the Supreme Court judgment in Sushil Sethi and another v. State of Arunachal Pradesh and others. Furthermore, they argued that their arrest was illegal for not adhering to Section 41-A CrPC and the Arnesh Kumar guidelines, as there was no apprehension of them absconding or tampering with evidence, and they had cooperated with the investigation. They also argued that the remand order was passed without proper judicial scrutiny of the grounds for arrest. Arguments for the Revenue/State: The judgment does not record specific arguments made by the State or Respondent No. 2 regarding the merits of the criminal case or the legality of the arrest and remand, beyond their appearance and representation.